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National Flood Insurance Program (NFIP)

Congress created the National Flood Insurance Program in 1968 to help provide a means for property owners to financially protect themselves. The NFIP offers flood insurance to homeowners, renters and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

ASFPM supports many of the provisions of the 2012 NFIP Reform bill, otherwise known as Biggert-Waters 2012, usually shortened to BW-12. A centerpiece of this reform bill was to make the NFIP more financially sound.

What the legislation did not address is the effects of the changes on policyholders and the affordability of flood insurance policies for those who truly cannot afford the increases. While there was a study included in BW-12 to examine affordability issues, it had no implementation mechanism. This paper discusses BW-12, the need for a financially-sound NFIP, and the options to address the affordability issue for lower income people who may not be able to afford the rate increases or for those who may need time to adjust to the premium increases.

ASFPM has developed an estimate, based on a careful analysis, of the total cost to provide floodplain mapping for all communities in the nation based on the parameters specified in the Biggert-Waters Flood Insurance Reform Act of 2012. ASFPM has identified criteria of what constitutes adequate flood mapping for the country, and has produced an estimate showing the initial cost to provide flood mapping for the nation ranging from $4.5 billion to $7.5 billion. The steady-state cost to then maintain accurate and up-to-date flood maps ranges from $116 million to $275 million annually.